Tax relief for home worker

monstermuncher

I work from home, which isn't optional in my job and apparently I'm entitled to tax relief.

I've been told (and colleagues have been successful in this) I can backdate to the start of my employment (1st May, 2005) is this true?

On the HMRC site it says for 2008-2009 it's £3 per week, or 2007-8 and earlier it's £2 per week.

Some of my colleagues have had it in a lump sum rebate, and others had their tax code adjusted. I'm unsure as to how a tax code adjustment would work? It works out just short of a thousand if it goes back to the start of my employement, that's got to be a massive difference in my tax every month to make that difference up.

monstermuncher

It also says more if you can prove it costs more than that. Heating and electricity in the day costs far more than £3 per week for me (I work full time from home, 40 hours a week of heat and electricity is a lot!), but I can't prove it because I'm on a prepayment meter. Any suggestions?

duchy

Do you not get receipts when you top up your card or key ?

monstermuncher

I don't keep them, and I'm not sure that would help anyway as it's only 8 hours of the day that I'm at work.

Mistral001

My accountant has advised me to claim up to 25% of heating/electricity and maintenance cost of home. This often does not cover the cost of the said heating/electricity, but says if I claim more tan that I run the risk of having to pay business rates and get planning approval for running a business from my home.

Living_proof

Hi,

There is a distinction between employed and self employed. I thought your employer could pay you a certain amount tax free (it was certainly a nominal amount as far as I remember) towards your costs. I would be very interested in the definitive answer as I too have been home working for several years. The house has to be heated most of the year as my work is very sedentary and of course the fuel costs have gone through the roof in the time I have been working from home.

monstermuncher

That's the same position I'm in.

What we were advised to do was to get a letter from our employer confirming xxx has been a home worker with us since xx/xx/xxxx, and we should attach that with a letter including our NI number and requesting a backdated claim. It's their discretion whether they grant a refund or a tax code adjustment, but I have requested a refund due to my current financial situation.

They've asked for further information, like why I work from home, and for previous addresses. I've supplied them with that information, now I'm just waiting to hear back.

Some of my colleagues got a big fat cheque (lucky sods) others are (I assume) paying less tax. The bit that I was curious about was that you can apparently claim more than the £2/£3 if it costs more, and as I work 40 hours a week plus overtime it costs me an awful lot more in heating and electricity!

Everybody who's done it says it's a real hassle and can take months, but it's worth doing. It'll presumably mean I'm £12 better off every month from now on as well, which can't hurt!

Living_proof

Apart from the obvious things like gas and electricity I also have to pay my own petrol and expenses if I go to the office as I am home-based as part of my contract. I am quite sure that I would be owed around £1000 if this £3 a week is fact. It's hard to know who to approach to get the right answer first time with the tax people. There are quite a lot of home workers in my industry now and there should be an easily accessible place on the government website where we can easily look it up.

monstermuncher

This is all I could find, the rest of the information has come from my colleagues who have been through the process.

They sure as hell don't want to make it easy for us!

http://www.hmrc.gov.uk/incometax/relief-household.htm

Mikeyorks

monstermuncher wrote: »

Some of my colleagues got a big fat cheque (lucky sods) others are (I assume) paying less tax. The bit that I was curious about was that you can apparently claim more than the £2/£3 if it costs more, and as I work 40 hours a week plus overtime it costs me an awful lot more in heating and electricity!

Everybody who's done it says it's a real hassle and can take months, but it's worth doing. It'll presumably mean I'm £12 better off every month from now on as well, which can't hurt!

If you claim actual costs it's the 'extra' cost for heating etc just your work area. You claim on a P87. The £3pw is tax relief. So you get eg £12pm at your marginal tax rate. If you pay tax at 20% ..... that translates to £12 @ 20% = £2.40. So I think the 'big fat cheques' may be an exaggeration?

If you have to work from home - get your employer to contribute? On the other hand they may point out the commuting etc costs you're saving and the increased flexibility?

monstermuncher

The only one I'm sure of, got a cheque for just under £300 and her tax code adjusted so she can earn more before tax. That's only £156 a year though, so this whole thing is me jumping through hoops for effectively £31 a year. How on Earth did she get £300? I wonder if they made a mistake with hers?